EnLink Midstream LLC (ENLC) 2024 Q1 法說會逐字稿

Greetings, welcome to the EnLink Midstream Q1 2024 earnings call and webcast.

(Operator instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Brian Brungardt, Senior Director of Investors.

Please proceed with your quest.

Thank you, Brian, you may begin.

Thank you and good morning, everyone.

Welcome to EnLink's first quarter of 2024 earnings call.

Participating on the call today are Jesse Arenivas, Chief Executive Officer; Dilanka Seimon, Executive Vice President and Chief Commercial Officer; and Ben Lamb, Executive Vice President and Chief Financial Officer.

Walter Pinto, Executive Vice President and Chief Operating Officer, is also in the room to answer any questions during the Q&A session.

We issued our earnings release and presentation after the markets closed yesterday and those materials are on our website.

A replay of today's call will also be made available on our website at investors.enlink.com.

Today's discussion will include forward-looking statements, including expectations and predictions within the meaning of the federal securities laws.

The forward-looking statements speak only as of the date of this call, and we undertake no obligation to update or revise.

Actual results may differ materially from our projections, and a discussion of factors that could cause actual events to differ can be found in our press release, presentation, and SEC filings.

This call also includes discussion pertaining to certain non-GAAP financial measures.

Definitions of these measures, as well as reconciliation to comparable GAAP measures, are available in our press release and the appendix of our presentation.

We encourage you to review the cautionary statements and other disclosures made in our press release and our SEC filings, including those under the heading Risk Factors.

We'll start today's call with a set of brief prepared remarks by Jesse, Dilanka, and Ben, and then leave the remainder of the call open for questions and answers.

With that, I would now like to turn the call over to Jesse Arenivas.

Thanks, Brian, and good morning everyone.

Thank you for joining us today to discuss our first-quarter 2024 results.

All our operations were not immune to the impact of the winter weather during the quarter, our results showcase the resiliency of our business.

We continue to be encouraged with the longer-term setup for EnLink given our diverse systems and incremental demand potential for natural gas to help power our nation's growing industrial and power needs, including the developing industries around data centers and artificial intelligence.

For the quarter, we generated $338 million of adjusted EBITDA, driven by the strength of our Louisiana system and offset by temporary volume impacts from the winter weather impacts of our G&P systems.

These results were in line with our expectations and drove solid free cash flow after distributions of approximately $74 million.

Consistent with our approach to return capital to investors, we repurchased approximately 50 million of units outstanding, taking our total buyback execution to nearly 10% of the units outstanding over a little more than two years, all while continuing to invest and grow our business.

Last quarter, we discussed our commitment to provide safe, reliable, and cost-efficient CO2 transportation solutions linking emitters with sequestration providers.

Despite recent progress on the regulatory front and while we continue to develop our CO2 transportation expertise by operating both newbuild and converted CO2 pipelines, the CCS industry as a whole has been slower to develop than we initially anticipated.

However, we are continuing our discussions regarding CCS opportunities of ExxonMobil, as well as other parties and look forward to providing an update when we reach definitive terms.

Overall, we continue to see positive momentum for our business.

We have spoken at length in prior quarters about the next wave of LNG demand coming starting in earnest in 2025 and how that is reshaping the landscape and driving our three phases of growth in Louisiana.

Dilanka will provide more color around our Louisiana natural gas strategy, and I'm impressed with the quick execution.

We are seeing customers respond to the shifting market dynamics as they look to secure the natural gas critical to their operations.

To that extent, we've executed our first project to help resupply the eastern part Louisiana through a capital-efficient quick-to-market debottlenecking project that is fully subscribed the high-quality customers.

Beyond just Louisiana though, the need for natural gas to help power our modern society becomes more apparent as industries look to secure reliable and affordable energy.

Like you, we've been amazed at the rapid emergence of the data center demand for power, particularly driven by the AI revolution.

This is occurring across the country, even right here in North Texas.

We understand and appreciate that these are early days and that consultants, policymakers, utilities, and the investment community are still trying to get their collective arms around the ultimate impact of this growth in demand, but the initial forecasts are staggering.

While data center electricity consumption was approximately 2.5% of the US total in 2022, their forecast for this demand tripled or more by 2030.

To help put that in perspective, according to the Boston Consulting Group, this growth in consumption is equivalent to adding 40 million homes.

What is key for our industry is that these AI data centers are not only voracious users of energy, but they run 24/7 and do not turn on at all.

Renewables will surely play a key part, but because of this dynamic, we expect natural gas to be a large contributor to meet the increased baseload demand for power generation.

We consider this to be a potential incremental growth driver creating a rising tide that will lift all boats in the natural gas industry and one that is likely to drive rapid and exciting change to our business.

Wells Fargo analysts predict forecast that additional natural gas demand could be 7 Bcf to more or more by 2030, assuming that natural gas accounts for 40% of the fuel mix.

To wrap up my comments, EnLink is executing today to meet customer needs and excited about the growing need for natural gas to provide reliable and affordable energy to power our modern society.

So with that, I'll turn it over to Dilanka to provide an update on our commercial opportunities.

Thanks, Jesse, and good morning, everyone.

Last quarter, we discussed the shifting Louisiana gas supply and demand market, and how we are focused on creating shareholder value.

Today, I would like to provide a quick update.

As I mentioned during the last call, we are approaching the Louisiana gas opportunity in three phases.

On our first phase of opportunities, which is realizing the full value of our existing assets through renewing capacity at higher rates, our commercial team has worked with our customers, and we have successfully renewed the vast majority of the contracts up for renewal in 2024.

This renewal represents an incremental annual margin opportunity, which is included in our 2024 financial guidance.

The second phase of opportunities is leveraging our assets to drive attractive quick-to-market projects.

Last night, we announced the first execution of such a project.

Through some additional compression, we are increasing gas supply to the Mississippi River Corridor by approximately 210 million cubic feet per day.

The project is expected to cost approximately $70 million, with an in-service date in the fourth quarter of 2025.

This debottlenecking project results in a mid-single-digit EBITDA investment multiple.

We are pleased to have fully contracted the capacity with a diverse mix of highly creditworthy customers.

The third phase of opportunities is to add new projects to increase supply to our gas pipelines, to meet the increasing demand in the Mississippi River Corridor market, and to expand our gas storage position.

In this regard, we are in the process of marketing our expansion of Jefferson Island Storage Hub and are very pleased with the response from our existing and new customers.

We are excited about this longer-term opportunity as we can nearly double our working gas storage capacity through brownfield expansions.

With that, I'll turn it over to Ben to provide an overview of our operations and our financial results.

Thanks, Dilanka, and good morning, everyone.

Let's start with the Permian.

For the segment, profit for the first quarter of 2024 came in at $89 million.

Segment profit in the quarter included approximately $9.3 million of gross operating expenses tied to plant relocations and $2.4 million of unrealized derivative losses.

Excluding plant relocation OpEx and unrealized derivative activity, segment profit in the first quarter of 2024 decreased 10% sequentially, but grew 12% from the prior-year quarter.

In addition to plant relo costs impacting operating expenses, the first-quarter results included a one-time utility true-up expense, increasing Permian OpEx by approximately $5 million.

Our diverse mix of producers remained active during the quarter.

However, results were impacted by the winter weather and producer timing.

Average natural gas gathering volumes were approximately 2% lower sequentially but were 13% higher than the prior-year quarter.

The Tiger II facility is in the process of coming online and will enable the next phase of Permian growth.

Turning now to Louisiana, we experienced another quarter of solid performance in the gas segment, benefiting from price volatility, along with strong results in the NGL segment driven by normal seasonal effects.

Segment profit for the first quarter of 2024 came in at $110.4 million, including $19.5 million of unrealized derivative losses.

Excluding the impact of unrealized derivative activity, segment profit in the first quarter of 2024 grew approximately 26% sequentially and grew approximately 23% compared to the prior-year quarter.

Moving up to Oklahoma, we delivered segment profit of $85.7 million for the first quarter of 2024, including $4.1 million of unrealized derivative losses.

Excluding the impact of unrealized derivative activity, segment profit in the first quarter of 2024 decreased 19% sequentially and decreased approximately 7% from the prior-year quarter driven by lower volumes and the one-time contract reset that we discussed in last quarter's call.

During the first quarter, we saw operators remain active with Regeneron acreage.

However, average natural gas gathering volumes were 7% lower sequentially and 3% lower compared to the prior-year quarter and as a result of the winter weather and a few cases of price-related shut-ins.

Wrapping up with North Texas, segment profit for the quarter was $59.8 million, including $0.1 million of unrealized derivative losses.

Excluding unrealized derivative activity, segment profit in the first quarter of 2024 decreased 12% sequentially and decreased 18% from the prior-year quarter, driven by lower volumes and the one-time contract reset.

Natural gas gathering volumes were 6% lower sequentially and 10% lower compared to the prior year.

Like Oklahoma, volumes were impacted by winter weather and a small number of price-related shut-ins.

These solid results reflect the benefits of our diverse asset mix, which are weather was a modest headwind for our G&P businesses.

While our Louisiana gas segment benefited from the short-term volatility.

In total, our segments drove another robust quarter with $338 million in adjusted EBITDA.

We are tracking toward the midpoint of our adjusted EBITDA guidance of $1.31 billion to $1.41 billion for full year 2024.

While we don't give quarterly guidance, let me remind you that our Louisiana NGL segment experienced some seasonality with the second and third quarters being seasonally weaker.

Capital expenditures, plant relocation expenses net to EnLink, and investment contributions were $111 million in the first quarter of 2024.

Free cash flow after distributions for the first quarter came in at approximately $74 million.

On the balance sheet side, we continue to be in a very strong position with a leverage ratio of 3.3 times at the end of the first quarter should we retain ample liquidity.

During the quarter, S&P recognized our strong credit profile and upgraded us to BBB- moving us into investment grade following the prior upgrade from Fitch.

Consistent with our capital allocation plan, we maintained the common unit distribution of $0.1325 per unit in the first quarter, which represents a 6% increase over the first quarter of 2023.

Additionally, we remain active with our common unit repurchase program with approximately $50 million spent in the first quarter.

This puts us on pace to complete our $200 million unit repurchase program for 2024.

Since the end of 2021, we've now repurchased approximately 46 million common units or nearly 10% of units outstanding.

In summary, the EnLink team delivered solid results in the first quarter of 2024, and we expect the momentum to continue for the rest of the year.

With that, I'll turn it back over to Jesse.

Thank you, Ben.

The EnLink team delivered another quarter with solid execution in the first quarter of 2024 that showcase the resiliency of our diverse assets.

We're excited for the future and remain committed to meeting the needs of our customers in 2024 and beyond.

With that, you may now open call for questions.

(Operator instructions) Spiro Dounis, Citi.

Thanks, operator.

Good morning, guys.

First question on carbon capture, if we could.

I was hoping for a little more detail on the status of Pecan Island specifically.

As you all noted last call, it sounded like all the parties were incentivized to really come to a resolution quickly just given some of the cash (inaudible) obligations coming in 2025.

So I'm just sort of curious, should we read anything into anything on the lack of the update here?

And are you in a better position now than where you were a few months ago to maybe narrow the bands on any potential outcomes?

Yeah.

Hi, Spiro.

It's Jesse.

Thanks for the question.

Yeah, I think last quarter, we talked about the pause and Pecan Island and the broader opportunity to address additional or alternatives to the Pecan Island project.

Those discussions continue.

We don't have an update today, but we have made a lot of progress on defining the scope of additional projects.

However, remember, this is a new industry, and it's been more challenging to find a mutually beneficial transportation option.

We're still working that, and we'll have an update as soon as we have one for you.

As I noted earlier, this has taken longer for the industry as a whole, has taken longer than we had predicted.

But remember, we have to proceed at the pace of the emitters and sequesters.

Until they define the definitive agreements, then our role can't be consummated.

So at the same time, we're gaining experience in the CCS space.

Our Bridgeport facility is now operating and giving us valuable, practical experience, both transporting CO2, capturing, newbuild, and repurposing of pipe.

So we think this is key.

We've said we are very well-positioned along Mississippi River Corridor with pipe in the ground, decades long experience with regulators, customers, and so we believe we have not lost conviction at all.

We think CCS will play a major role in decarbonizing the industrial sector.

We think we're very well-positioned to take advantage of that.

And ultimately, timing hasn't been as planned, but longer term, we believe we will win.

Got it.

Thanks for that, Jesse.

The second one maybe for you, Ben, just thinking about some of the items that impacted the first quarter and how to think about moving forward with 2Q.

You mentioned some shut-ins in Oklahoma.

Curious if that you see a bigger impact there as we head into 2Q, if you think maybe well connections are enough to offset some of that.

And then in the Permian, obviously, you mentioned weather impact early in the quarter.

Just maybe give us a sense of how you exited 1Q and what that looks like for 2Q?

Yeah, Spiro.

Starting in Oklahoma, I think most of the shut-in activity is either in the rearview mirror or will be here very shortly.

It was very isolated, but between a little bit of that and the winter weather, volumes were a bit soft for 1Q.

Actually, have a pretty robust schedule of well connects for Oklahoma in the coming days here, so we feel good about Oklahoma for the rest of the year.

In terms of the Permian, but for the winter weather, volume would have been about flat in 1Q versus 4Q, and that's not surprising when you think about the way we've talked about the growth in the basin this year.

After we had this furious pace of growth in the midland basin last year, this year midland is flatter, and the growth is in the Delaware.

The Delaware has been full for us.

In fact, we've been offloading some volumes waiting on the plant to come online.

Good news is the plant is coming online literally as we speak, and that's what will enable that next leg of Permian growth.

Got it.

I'll leave it there.

Thank you, gentlemen.

Thanks.

Praneeth Satish, Wells Fargo.

Hi, guys.

Good morning.

I guess, unless I missed it, can you can you give us an update for where you see CapEx trending in '24 and '25 in light of the Henry Hub to River project?

Did anything change there as it relates to CapEx guidance?

And then I think you've got $50 million, if I remember correctly, for the Exxon -- for a kind of a placeholder for Exxon CCS projects in the budget this year.

Could that be reduced given some of the delays that you mentioned?

A good morning, Praneeth.

Big picture CapEx, you know, the midpoint of the 2024 guidance is $465 million and that has not changed with the Henry Hub to River project.

We reserve some dollars in the capital budget for these Phase 2 Louisiana gas expansions so there's no addition for this year.

Too early of course to talk about a 2025 CapEx.

But I would just say that sitting here today, we don't have any reason to believe it is materially different than the run rate we've been on in '24, even back in 2023.

On the CCS side, you're right.

We did allow for $50 million of CCS spending in arriving at our FCFAD guidance for 2024.

And you're also right that as the year goes on and things have been slower to develop than we would have hoped, it becomes less likely that we spend all $50 million of that.

We don't have an update for you today, but it potentially could result in an increase in 2024 FCFAD.

All right, thanks.

And then, I guess, as I look at your Phase 1 of your Louisiana growth strategy, I think you're getting a $20 million uplift this year.

How much of your remaining Louisiana transport contract portfolio is still under legacy rates where you could kind of reprice it to current market rates?

And I guess, do you think you could see another $20 million bump in 2025?

Hi.

It's Dilanka here.

Good morning.

We are indeed very happy with the recontracting we've been doing.

Louisiana gas system speaks really well to the value of assets.

As you indicated correctly, most of the recontracting rates already baked into the '24 budget.

We don't see a similar uplift in '25.

We're at this point substantially recontracted for the rest of '24, and we are working on renewables of '25.

There might be a marginal uplift, but majority comes in the number that was baked in this year.

Got it.

Thank you, guys.

Naomi Marfatia, UBS.

Hi, good morning.

Thank you for taking my question.

Maybe as a follow-up to an earlier question.

As we look ahead, seems like EnLink has some good Permian growth expectations particularly around the Delaware.

Can you give us an update on potential need for adding processing capacity beyond the Tiger II plant location?

Yeah.

It's, of course, you've been focused on getting Tiger II in service to enable the next leg of growth.

As far as looking beyond that, the good news is we've now three times successfully relocated an existing processing plant to the Permian.

And so that gives us the luxury of being able to time the decision to add capacity closer to the need.

So we'll be watching carefully as the year develops and as our producers share their plans with us when the right time to add that next capacity.

We don't think that the decision we have to make today because with the benefit of a portfolio of assets eligible for relocation, we can bide our time a bit and learn more from our producers to get the timing just right.

Great.

Thanks for the color.

Maybe to switch to capital allocation, given endings high FCF yield, curious on the thought process around balancing the value proposition between buybacks and/or deleveraging?

Yeah.

We remain focused on returning capital to the common unit holder.

As we said in the prepared remarks, over the past few years now, we've eliminated about 10% of the shares outstanding through the share repurchase program, and we'll continue to execute the $200 million common unit repurchase program that the Board authorized for this year.

On the balance sheet side, we're in very good shape having just gotten the upgrade to BBB- from S&P, and we are at or slightly below, in fact, our leverage target.

So we're largely going to remain focused on the common unitholder.

Thanks for the call.

Have a great rest of your day.

Jeremy Tonet, JPMorgan.

Hi, good morning.

Morning.

Just wanted to touch base on the Louisiana side a little bit more as far as either phases of the project and just wanted to get an update, a better feel for, I guess, what the scope of the potential opportunity is in the timeframe that these phases could come to fruition?

Good morning, Jeremy.

Nice to hear from you again.

The Henry Hub to the River project is indeed great example of a quick to execute, good return on capital project that needs immediate customer demand and leveraging our assets in the ground.

So just a bit color on the project, this one adds compression along our 26 inch connecting the Henry Hub to the River project market to increase throughput by about 210 million cubic feet per day.

The best thing is that we are fully contracted for this project with a diverse set of creditworthy customers.

So that project is well underway and on execution.

I'll also add that we executed a similar project like this last year by adding compression to increase deliveries to the Venture Global Calcasieu Pass project again by about 200 million cubic feet per day.

And the good news today is that we have more demand for this and we are working on even other opportunities to bring additional supply to our systems through better interconnectivity, newbuild pipe natural gas storage expansions, et cetera so the funnel of opportunities is quite encouraging.

Beyond these debottlenecking type projects that I just mentioned the storage expansion, the newbuild part, et cetera, will take a little bit longer, but the teams are very focused on bringing these projects to market because clearly, there is a market demand for it.

Got it.

So do I take that kind of like, no, we shouldn't really expect any incremental announcements in the near term.

Kind of things are accomplished in the near term for the Louisiana strategy or just trying to get timeframe of when these items could come together as you outlined?

Sure.

I think the near term you potentially can expect something on the storage side, as we've talked about the 9 Bcf storage expansion we are working on.

We've completed the engineering studies, and we are busily marketing that expansion.

So in the next couple of quarters, you can potentially expect us to FID off-storage expansion as well.

Jeremy, this is Jesse.

Let me just add kind of on a macro yield.

We've said before you have the optionality of our Louisiana assets is MBS, we operate two of the four market systems.

There's redundancy.

So there's a lot of these low -- a lot of low-hanging fruit that we continue to try meet the customer demand.

So I think, it just proves that owning this diverse set of assets continues to provide future opportunity for our business.

Got it, thank you for that.

And then just quickly wanted to go to the Oklahoma and North Texas segments, just wondering given the current strip and given your producer-customer conversations, how do you feel about executing against that segment guidance at this point?

We feel good about the segment guidance at this point.

Clearly, there was a headwind from the weather and a little bit of that shut-in activity in the first quarter.

But like I say, I think most of that is in the rearview mirror or will be here shortly.

And I think things look bright, particularly in Oklahoma, as we get closer to the end of the year as the strip for 2025 gets closer -- becomes closer to it realization.

Got it, thank you for that.

I'll leave it there.

Thanks.

Elvira Scotto, RBC Capital Markets.

Hey, good morning, everyone.

I guess just one question from me.

Any impact that you guys see from kind of where the Waha prices are, the negative Waha prices.

I know you have some takeaway capacity I believe on Whistler.

So it really impacts when Matterhorn

[comes on].

I think you did some capacity, but just any color there would be helpful.

Yeah.

Hi, Elvira.

We really haven't seen much impact from the challenges at Waha for the gas that we market.

We've already hedged Waha basis last year at prices significantly better than, of course, what you see on the screen today.

So it's not a direct price risk to us.

And in terms of producer behavior, obviously, it's in oil-directed basins.

Nobody's shutting in over negative Waha prices but also just given who our customers are, they do a good job of planning their transportation needs and so everyone has egress out of the basin.

We're really not seeing much of an impact from what's going on at Waha right now.

We are excited, though, to bring Matterhorn on in the second half because clearly, the market is demonstrating but there's a need for that capacity.

Well, thank you very much.

Wade Suki, Capital One.

Good morning, everyone.

Thank you all for taking my question.

Just wondering if you might be able to comment on what you're seeing in the M&A market, maybe contrast how the sort of inorganic opportunities might rank compared to organic, if you don't mind?

Yeah.

Well, there's quite a few assets in private hands that need to find permanent homes.

And I do think that seller expectations has somewhat moderated over the last couple of years, but we're going to remain very disciplined in doing anything in the M&A market to make sure that it does exactly what you're talking about, but it competes favorably with the other uses of capital that we have including all of the things that the law has talked about in Louisiana.

So while we are always in the flow of those discussions, you're going to see us remain very disciplined.

Got it, thank you.

And just thinking about kind of commercial activity in Louisiana, could you maybe contrast sort of what you're seeing today in terms of pipeline prospects versus what you might have been seeing six months ago, a year ago?

I'll take that one.

I think we are seeing the demand driver to continue.

A lot of the industrial facilities in that region are facing the dynamic of the LNG full of gas, particularly as a venture local documents facility comes online.

So I would say that, the difference is that people are seeing the demand materialize.

A lot of people kind of tangentially knew this was going to happen, but it's becoming more real as we've seen in the recontracting of our capacity and the ability for us to bring relatively quickly these projects to market.

And as I mentioned earlier, we have several other projects that we are pursuing and that together with the participants in that area kind of coming to terms with the changing dynamic there.

I think bodes really well for future projects for us.

Fantastic, thank you.

One more if I may squeeze it in here.

Kind of dovetailing off that last bit more of a macro question.

You are seeing any signs of a softening or a slowdown among your industrial customers to the extent you could speak to it?

No, we are not seeing that impact.

There are some expansions being announced, particularly on the ammonia side with all the incentives that are at play.

Currently, the blue ammonia sector is kind of really taking off.

Recall that one of these ammonia plants kind of the world class, kind of train which is about 1.3 million tonnes of ammonia is about 110 to 130,000 MMBtu of gas per day per train.

So many are being discussed around the river corridor, around the asset, so that's creating incremental demand in addition to the kind of robust demand there already exists in that area.

One thing I'll add is the storage component.

With natural gas price volatility together with the demand from the LNG plants that are coming along to meet their operational flexibility, you really need storage, gas storage to balance that out.

The increasing power demand is another reason for that to grow.

So I think, again, I just noted, our Jefferson Island storage, Napoleonville storage are very crucially located to absorb that market demand as well.

So we are very excited about that opportunity in storage in addition to the transport bit.

Fantastic.

Thank you so much for taking my questions.

Harry Mateer, Barclays.

Hey, good morning.

I have a follow-up on the balance sheet and acknowledging you're a bit below your leverage target, but now you do have IG ratings with two to three agencies, does change anything for you in terms of ways you could optimize the balance sheet, whether that's different tranches of the debt, coupons, or

[tenure].

And I guess related, when you look at the preferreds, does the shifting narrative recently about the trajectory of rates this year caused you to maybe reconsider paying those down further or maybe replacing with senior debt since you do have some balance sheet capacity?

Thanks.

Hey, Harry.

Lots to unpack there.

I mean, I think the good news on most of the debt structure is that, it was put in place at a time when the base rates were significantly lower than they are today.

And so, while the upgrade to investment grade is recent, we already had a very low-cost debt structure in place, and so I don't think that there are that many opportunities to optimize within the existing debt structure.

Now, on the preferred side, in general, we still think that it's better value to focus our excess free cash flow on returning capital to the common unit holder.

But we have opportunistically reduced the preferreds, particularly when we can get them below par, which, frankly, likely hasn't been very easy to do.

Don't be surprised to continue to see us do a little bit of that opportunistically, but we don't have anything, no current plans to do anything bigger on the preferreds including by using the -- as you say, a little bit of leverage capacity that we have because, having just gotten the upgrade from BBB-, we want to be clear we're committed to it retaining that BBB- rating.

And I think that increasing leverage to do that to deal with the preferreds with at this point would may not be in keeping with that goal.

Got it, very clear.

Thank you.

Thank you.

There are no further questions at this time.

I'd like to pass the floor back over to Jesse for closing comments.

Thank you, Alicia, for facilitating our call this morning.

Thank you, everyone, for being on the call.

As always, we appreciate your continued interest and investment in EnLink.

We look forward to updating you with our second-quarter results in August.

In the meantime, we wish you well and have a great day.

That concludes today's teleconference.

You may disconnect your lines at this time.

Thank you for your participation.